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2010 GeoInvesting Third Quarter Earnings Watch

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Here are some U.S.companies we are actively tracking ahead of 2010 third quarter press releases. We believe they may have a good chance to eclipse analyst estimates or are about to experience an acceleration in EPS growth.

Asbury Automotive (NYSE:ABG) (see alerts) *Price: ABG $14.78

  • The Industry leader
  • Expected to achieve three quarters of 30% + growth of EPS.
  • Revenue growth will only average about 11% in 2011
  • EPS growth begins trailing off in second quarter 2011
  • With revenues of ~$4 billion dollars it is outside our wheelhouse
  • We are curious to see if this automobile retailer will surprise the street as economy improves
  • Our fair value target if estimates are achieved- $17 to $26

Addvantage Techs Group (NASDAQ:AEY) (see alerts) *Price: $3.25

  • Two back-to-back quarters of strong sales and EPS growth
  • Still holding short term trading position
  • Company has had sporadic EPS history
  • Benefiting from cable companies initiatives to upgrade their equipment to provide HD programming. Do not know how long trend will continue.
  • Weak economic conditions have caused many customers to delay plant expansions. This is a short term negative that could turn into a positive surprise as economy improves.
  • Selling below book value of $3.18

Alpha Natural Resources (NYSE:ANR) (see alerts) *Price: $44.50 (Coded as a GeoSpecial @ $42.99)

  • Expected to achieve  six consecutive good quarters of 70% + EPS growth
  • Revenue growth will average about 11%
  • With revenue of ~ $4 billion dollars it is outside our wheelhouse
  • We like to track this company because it has indirect exposure to China

A T Cross A (NASDAQ:ATX) *Price: $5.98

  • Mundane industry
  • Revenue growth will be meager at 5% for next several quarters
  • Selling below book value of $6.36
  • Recently raised guidance
  • Buying back a significant amount of stock. Analyst estimates probably do not account for this, which could lead to upside EPS surprise.
  • EPS estimates for 2011 are calling for 28% growth

Axt (NASDAQ:AXTI) (see alerts)  *Price: $6.54 (Coded as a  GeoSpecial @ $5.20)

  • EPS growth of at least 50% for next three quarters
  • Only one quarter of next six is sub par. Second quarter of 2011 is flat
  • Has history of exceeding estimates
  • Products are a direct beneficiary of smart phone craze.
  • Outlook is strong
  • Targeting high growth areas in technology sector: Wireless, fiber optic and solar industries
  • Paying very little taxes
  • Believe it is close to short-term fairly valued on a fully taxed basis. Long-term target $9.00

Nanometrics (NASDAQ:NANO) (see alerts) *Price: $13.01  (Coded as GeoSpecial @ $12.07)

  • Has pulled back after a steady rise from when coded as a GeoSpecial at $12.07
  • Products are a direct beneficiary of smart phone craze
  • After third quarter, only two above average growth quarters left. Will need to report a spectacular quarter to gain momentum.
  • Second quarter conference call was extremely bullish
  • Agressive target- $17.00

Blonder Tongue Labs (NYSE AMEX:BDR) (see alerts) *Price: $2.35 (Coded as GeoSpecial @ $1.84)

  • Company is benefiting from a transition in its business plan, where it is switching its product offering from analog to digital.
  • Second quarter was break out quarter
  • Momentum is expected to continue through the rest of year
  • Stock is selling below book value of $3.37
  • Company is not paying taxes
  • Minimum short-term target of $6.00

Intest (NASDAQ:INTT) (see alerts) *Price: $3.07

  • Major customers are semiconductor companies. This can lead to volatile quarters.
  • After 11 straight quarters of losses the company has put together three consecutive sequentially profitable quarters in a row.
  • Comments suggest that semiconductor cycle is in an uptrend.
  • 2010 second quarter was a dramatic quarter. We were unable to gauge if these levels will be maintained.
  • Conference call was bullish, but tempered.
  • Guidance for the 2010 third quarter is wide, but still implies strong comps.
  • Any talk of sustained optimism could send this stock to much higher levels.
  • Not taxed
  • Agressive short-term target if EPS targets are met- $6.40

Magic Software Entrs (NASDAQ:MGIC) (see alerts) *Price: $2.59

  • Cloud computing
  • Has experienced three consecutive quarters of dramatic EPS growth.
  • No guidance
  • Fourth quarter will be a tough comp.

Amtech Systems (NASDAQ:ASYS) (see alerts) *Price: $17.35  (GeoSpecial @ 11.27)

  • Has pulled back after a steady rise from when coded as a GeoSpecial at $11.27.
  • Second quarter was extremely bullish
  • Contract backlog is at record high, given us some confidence that estimates can be exceeded.
  • Three of the next 5 quarters are expected to show impressive growth. A lull is expected to occur in the second quarter of its fiscal 2011 second quarter.
  • Fiscal third quarter conference call was extremely bullish.

Orbit Intl (NASDAQ:ORBT) (see alerts) *Price: $3.29

  • We are still waiting for ORBT to turn the corner. Which could still be one quarter away.
  • Could be a nice sleeper stock once it turns this corner

Whx Corporation (NASDAQ:WXCO) *Price: $10.37

  • New on our radar due to a huge 2010 second quarter.
  • We are not sure if the quarter is repeatable, since no guidance was provided and securing an interview has been difficult.
  • Eager to see if 2009 third quarter financials will continue trend
  • No analyst coverage

*Prices are as of business close on Friday, October 22, 2010
Disclosure: Long AEY ATX AXTI NANO BDR INTT MGIC ASYS ORBT

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